EUR/USD pair rose initially during the Friday session as the 1.30
level keeps offering support, but the market gave up gains as we
entered the US session. The pair is presently fighting it out at
a massive level, and this market looks very bearish at the
moment. With the whole world running from anything European
related and the bond yields in places such as Italy and Spain are
starting to see higher levels again, even after the recent
actions taken by the ECB. The fact that nothing seems to “fix”
the Euro has us extremely concerned about owning the currency at
the moment, and this pair is no different in that regard. The
Dollar will continue to have a safe haven bid under it as capital
continues to flow into US Treasury notes. The market is very
headline sensitive at the moment, and the Euro will continue to
be hit hard by random bad news going forward. With the area going
into recession, this will not help going forward either. The
European Central Bank is expected to start a printing
campaign during the year coming up as well, and this of course
will weigh on the value of the Euro overall. With these two
factors on top of the debt concerns, the Euro certainly seems
somewhat doomed for the foreseeable future. However, the 1.30
level continues to frustrate the sellers. The level is supportive
all the way down to the 1.29 mark, and will continue to offer a
fight. With that being said, one cannot help but notice the
recent attempts at rallies that simply fail and fade during the
second half of the trading sessions. Because of this, we think
that the first weeks in January will be very important in this
pair and could finally see the move we all have been waiting for.
We would gladly and aggressively sell this pair below the 1.29
level and on rallies as well. We cannot buy until we get above
the 1.35 level as it would show a real change in market sentiment
regarding the Euro.

It is the holidays’ season and trading on Tuesday is expected to
be within tight ranges after EUR/USD the Christmas holiday on
Monday and with investors sidelined ahead of the end of the year
and an infamous low volume trading week. The eyes this week are
only on the Italian debt sale and that summarizes it with nothing
major waiting and choppy and tight trading ranges are expected to
dominate investors and the market during this week in general.
The United States will release the Consumer Confidence for
December at 13:00 GMT which is expected to rise to rise to 58.5
from 56.0.

USD/JPY Technical Analysis for December 26, 2011

USD/JPY fell on Friday as the markets cooled for the holidays.
The 78.50 level continues to keep the pressure on the pair as it
simply cannot rise above that mark. The pair is being supported
by the Bank of Japan, but at much higher levels. With this in
mind, we prefer selling going forward, but would also like to see
a rally in order to do so. At the moment, this pair is too tight
to interest us in trading it.

The USD/JPY pair advanced last week to its highest level in three
weeks, where the cheerful U.S. Housing data helped support the
market confidence which increased demand for higher-yielding
currencies, sending the yen and the greenback to the downside.
Narrow range trading is mostly expected for the USD/JPY pair
during this week, as the volume will be at its lowest due to the
holidays which will drag investors out of the market. On Tuesday
at 05:00 GMT, Japan will issue the annual Construction Orders for
November, where the previous reading was up by 24.3%, on the
other hand the Annualized Housing Starts for November is expected
to come at 0.802 million from the prior 0.774 million. On Tuesday
at 15:00 GMT, the U.S. economy will release the Consumer
Confidence for December, where it's expected to rise to 58.5 from
the previous reading of 56.0.

GBP/USD Technical Analysis for December 26, 2011

GBP/USD fell hard on Friday as traders continue to reject the
pair at the 1.57 level. The market has fallen quite hard for a
light session, and this shows just how much pressure the pair
currently has on it. However, the 1.55 below has been just as
stubborn to give way. Because of this, we think there will be
continued consolidation between the two levels going forward, and
we are playing this pair like that at the moment. The breaking of
1.53 to the downside would signal heavy selling at this point and
have us aggressively selling cable. Until that happens though, we
are simply trading for scalps going forward.

On Monday trading, the markets are closed due to the year-end
holidays. For Tuesday,while the U.K. lacks fundamentals, the
U.S., will release S&P/caseShiller for the month of Oct., due
at 14:00 GMT, which is predicted to record -0.20% from the prior
-0.50%, followed by consumer confidence, available at 15:00 GMT,
where analysts forecasts a soar to 58.5 in Dec. from 56.0 a
month earlier. Eyes will track the latest data from theU.S.to see
the progress of the economy as last week's data provided hopes
theU.S.economy will lead the recovery path in 2012 without the
need of further stimuli from the Fed. Thus, the pair is expected
to be affected by the data, yet it may also follow the general
trend in the market which is focusing on the latest developments
in the euro region. In the U.K, the outlook remains clouded with
uncertainty as King said last week debt crisis will threat the
real economy recovery while the latest announcement by officials
referred that the outlook for the British economy will largely
depend on the latest developments in the euro zone. Thus, in
2012, the situation in theU.S.seems to be much better than
theU.K.along with the refuge merit of the dollar which suggest
further advance for decline for the pound versus the greenback at
least in the first half of the year.

USD/CHF Technical Analysis for December 26, 2011

USD/CHF rose a bit during the Friday session as the pair
continues to grind higher. The 0.93 level that was broken above
recently has been very supportive over the last week, and we
think this is a possible sign of things to come. The pair is
being supported by the fact that the Swiss National Bank is
working against the value of the Franc and this should continue
to push this pair higher. Also, the Dollar is the safe haven
everyone wants. Because of this, we are buying this pair overall,
and especially on dips.

On Monday trading, the markets are closed due to the year-end
holidays. For Tuesday, as of 07:00 GMT, the Swiss economy will
release UBS
consumption Indicator for the month of Nov., yet the release is
expected to have slight impact on the pair's movements. The U.S.,
on the other hand, will release S&P/caseShiller for the month
of Oct., due at 14:00 GMT, which is predicted to record -0.20%
from the prior -0.50%, followed by consumer confidence, available
At 15:00 GMT, where analysts forecasts a soar to 58.5 in
Dec. from 56.0 a month earlier. Eyes will track the latest data
from theU.S.to see the progress of the economy as last week's
data provided hopes theU.S.economy will lead the recovery path in
2012 without the need of further stimuli from the Fed. Thus, the
pair is expected to be affected by the data, yet it may also
follow the general trend in the market which is focusing on the
latest developments in the euro region. For the franc, last week
there have been talks last week about further measures to curb
the franc's advance as a panel from the government and the
central bank discussed measures such as capital controls and
negative interest rates and even restrictions, including a
possible ban, on foreigners buying Swiss real estate to halt the
franc's rally which negatively affected prices and exporters.
Therefore, the franc may be under some pressure on growing
speculations policy makers will intervene again to push down the
franc.

EUR/CHF Technical Analysis for December 26, 2011

EUR/CHF rose again during the Friday session, but only slightly
so. The pressure is certainly to the downside in this pair
currently as each rally is only producing slight momentum. With
the massive issues in the EU presently, it is hard to think there
will suddenly be a change of attitude regarding owning the Euro.
The pair does have a floor at 1.20 mandated by the Swiss National
Bank though, so we aren’t keen to sell at these levels now. We
like buying on dips, but understand that these trades are of the
ultra-short term kind for 20 pips at a time or so.

It is the holidays’ season and trading on Tuesday is expected to
be within tight ranges for the EUR/CHF after the Christmas
holiday on Monday and with investors sidelined ahead of the end
of the year and an infamous low volume trading week. The eyes
this week are only on the Italian debt sale and that summarizes
it with nothing major waiting and choppy and tight trading ranges
are expected to dominate investors and the market during this
week in general. No major news scheduled and the market movement
will be thin on low volume and focused on the sentiment.

AUD/USD Technical Analysis for December 26, 2011

The AUD/USD rose a bit during the Friday session, only to fail at
the 1.02 level. The resulting candle is a short shooting star and
shows the 1.02 is still going to cause a reaction in the markets.
The pair is tightening up the range it trades in lately, and as a
result we are calling for choppy trading with a slightly downward
bias as the pair is highly sensitive to the headline risks out
there. Because of this, we are trading this pair as it has a
ceiling of 1.02 and a floor of 0.99 at the moment. Looking at the
chart, it might be time to sell now.

The AUD/USD pair advanced last week on the back of the weak U.S.
dollar, where the risk appetite returned to the financial market
before the end of the year, which supported Aussie. However, the
main trend in the market is still for further gains for safer
assets such as the yen and the greenback, and this current break
does not mean that the financial market got over the problems and
disasters, as the escalating debt crisis is still the current
predicament. On Tuesday at 15:00 GMT the U.S. economy will
release the Consumer Confidence for December, where it's expected
to rise to 58.5 from 56.0.

USD/CAD Technical Analysis for December 26, 2011

USD/CAD fell on Friday as the oil markets continued their climb.
The $100 level still wasn’t broken to the upside in the Light
Sweet Crude markets, so there wasn’t much in the way of momentum.
This isn’t overly surprising though as the volume was undoubtedly
light for the session. The resulting candle for the session was a
hammer, and we are currently in the middle of our support zone
between the 1.03 and parity levels. The 1.02 area where this
candle has formed has been supportive in the past, so this wasn’t
a major surprise. With this in mind, we prefer to buy as the oil
markets look a little overbought at this point, and this hammer
has appeared. We are willing to buy on a break of the highs from
the Friday session. We aren’t willing to sell until we get under
the 0.99 level.

The USD/CAD steadied around the opening level Friday, as traders
switched on holiday mode with Christmas on doors, so trading
volumes ebb down and market movement is rather limited in a
tighter range before the New Year’s holiday, yet with slight
punch of risk. Sentiments will start to shape as investors remain
cautious ahead of the New Year’s holiday but traders will be
mostly concerned about the latest development from the 17-bloc
euro area. The USD/CAD pair could still rise if pessimism
continues to dominate markets, but we still expect volatility to
hold the steer for now, as uncertainty remains the main theme in
markets, and that could also lead to deep fluctuations for the
USD/CAD pair. Tuesday December 27: No economic
data will be released from Canada so eyes will be focused on
Europe and the latest updates which could impact sentiments over
the holiday season.

NZD/USD Technical Analysis for December 26, 2011

NZD/USD had a flat day on Friday as the markets finally seem to
be sliding into the holiday mode. The pair is at the top of its
most recent range, and we feel the 0.78 level should continue to
offer resistance. With this in mind, we are also aware that the
0.75 level will offer support. Because of this, we are simply
range trading this pair for quick scalps using these two levels
are boundaries. Selling at 0.78 and buying at 0.75 seems to be
the way forward.

The NZD/USD pair covered some of its previous losses last week,
as the US dollar dropped against most of its major counterparts
due to the risk appetite that reduced demand for safer assets.
The current market sentiment witnessed a little improvement on
the back of the cheerful U.S. economic data, but caution still
exists as the debt crisis remains the overall focus. On Tuesday
at 15:00 GMT the U.S. economy will release the Consumer
Confidence for December, where it's expected to rise to 58.5 from
56.0.